AI Agents and Appraiser Oversupply

[alebrewer]

Yep - doesn't matter what the technology is - appraisers aren't going to avail themselves of it (en masse anyways) unless and until forced to do so by the GSE's ('new' market analysis requirement as an example)... let's say they somehow get those new forms released this year (a feat in and of itself). How long do you think it will be before they're able to release new (new) forms to accommodate AI and advanced statistical analysis?

 

[J Grant]

Yep - doesn't matter what the technology is - appraisers aren't going to avail themselves of it (en masse anyways) unless and until forced to do so by the GSE's ('new' market analysis requirement as an example)... let's say they somehow get those new forms released this year (a feat in and of itself). How long do you think it will be before they're able to release new (new) forms to accommodate AI and advanced statistical analysis?

They are using AI to review our reports

If AI helps appraisers fill out the URAR faster that is a good thing - it would embed with the software. GSE's are not out to help us with anything. They ask for something and expect us to provide it. Their new additional statistical proof took one day for me to figure out and add it. The main work in the appraisal is the inspection when part of the report and comp selection and analysis. Which there is no need for super speed for with a 500k loan at stake -

 

[Joe Flacco]

There is a lot of uncertainty for sure. What's happening these days is different from anything in the past.

I don't know what's going to happen or if it will continue to be the case, but doing things the way I think it should be done has served me well.

 

[Joe Flacco]

I strongly disagree that the way they are going is more credible, reliable, or accurate.

This stuff about appraisals being accurate or not by using avms or statistical analysis as the benchmark is ridiculous.

 

[CGinMN]

GSE approval is not needed for any of the following... Just you and your Agent having a conversation and writing a report together.

Appraiser: Let’s move on to the appraisal for 123 Main Street. Pull all public, MLS, and data collection records into the workfile and give me a verbal summary of the home. Show me the floor plan of the subject then the 3D walkthrough as you describe what you see.

AI Agent: Retrieving data... The subject is a 1965 ranch-style home with 3 bedrooms, 2 bathrooms, and 1,800 square feet of GLA. Here is the floor plan. You’ll notice a traditional layout with bedrooms grouped on one side of the home, a central living area, and a combined kitchen-dining area on opposite side. Here you can see the home features metal siding, a 2-car attached garage, and a lot size of 0.25 acres. Permits show a roof replacement in 2021, which I’ve verified using a time-lapse sequence of aerial photos provided by Google.

Comparing MLS photos from the 2016 listing and to the current listing show that the kitchen was remodeled after the 2016 transaction. No permits were recorded for a kitchen remodel, however the quality and appearance of the work appear to be professional.

AI Agent: As we enter through the front door, the living room features hardwood floors....

Appraiser: Stop, I've seen enough. Proceed to the site overview. Show me aerial imagery and note any externalities.

AI Agent: Here is the aerial view. The subject backs onto a wooded area, providing privacy, and the front faces a busy residential street. The surrounding homes are similarly aged ranch-style properties, all well-maintained.

One externality to note: The busy road does not appear to affect usability but may be a consideration. The lender's reviewer would likely ask about it and GSE seller guides require some analysis,

Would you like to explore any additional details before we proceed to comp selection?

Appraiser: No, let’s move on. Pull similar sales within one mile, similar in size, style, and age, sold within the last six months. I would like to find one sale abutting the same busy road as the subject. You can go back to find something within the past year if necessary.

AI Agent: Searching… Out of 35 properties I’ve identified four potential comparables. Would you like me to summarize them or show their aerial views first?

Appraiser: Summarize them while showing me MLS photos of the interior.

AI Agent:

1. Comp 1: 3-bed, 2-bath, 1,850 sqft, sold for $450,000, located 0.5 miles away, renovated kitchen and updated bathrooms.
2. Comp 2: 3-bed, 2-bath, 1,950 sqft, sold for $420,000, located 0.1 miles away, original finishes, backs to a busy road.
3. Comp 3: 3-bed, 2-bath, 1,800 sqft, sold for $435,000, located 0.4 miles away, partially updated kitchen, original baths.
4. Comp 4: 3-bed, 2-bath, 1,900 sqft, sold for $460,000, located 0.8 miles away, fully renovated with a finished basement.

Comp 3 is the most similar in size and features but has an older kitchen. Comp 2 backs to a busy road. Comp 4 has a fully finished basement, which the subject lacks, likely requiring a significant adjustment.

Would you like me to help develop an adjustment for potential external obsolescence due to the busy road.?

Appraiser: Yes, typically we use around 3-5 percent for something like this. You can check in for something in my prior reports that we can use.

AI Agent: Searching report workfiles… Based on a prior appraisal you did in this neighborhood in 2025, you conclude a -2.5% adjustment for proximity to a busy road based on a paired sale. I will include a summary of that data the addendum....

Yep - doesn't matter what the technology is - appraisers aren't going to avail themselves of it (en masse anyways) unless and until forced to do so by the GSE's ('new' market analysis requirement as an example)... let's say they somehow get those new forms released this year (a feat in and of itself). How long do you think it will be before they're able to release new (new) forms to accommodate AI and advanced statistical analysis?

Likely it will be the market will force appraisers to adapt. I don't think it will require any special appraisal software, just a computer with an AI Agent.

 

[Mark K]

Comparing MLS photos from the 2016 listing and to the current listing show that the kitchen was remodeled after the 2016 transaction. No permits were recorded for a kitchen remodel, however the quality and appearance of the work appear to be professional.

AI Agent: For your convenience, the lack of the appropriate remodeling permit will not be included in the calculations, however the lack thereof will be reported to the appropriate zoning department for their review and consideration.

 

[J Grant]

There is a lot of uncertainty for sure. What's happening these days is different from anything in the past.

I don't know what's going to happen or if it will continue to be the case, but doing things the way I think it should be done has served me well.

Read some books on the subject. That is what I am doing - AI is a powerful tool, but regardless, it does not think and perceive in context the way people do and can make clueless errors despite its sophistication. It has no morality and no ethical core and will act for good or bad as programmed, or hacked in to perform.

I suppose when and if society evolves or develops to the point where it has no regard for human input, AI will take over, at which point it will conclude humans are useless and inefficient, and the AI-programmed drones and autonomous weapons will take us, humans, out. It has facial recognition and data on us, and all it needs to do is programmed domestically or friendly to take us out. Problem solved.

 

[J Grant]

GSE approval is not needed for any of the following... Just you and your Agent having a conversation and writing a report together.

Appraiser: Let’s move on to the appraisal for 123 Main Street. Pull all public, MLS, and data collection records into the workfile and give me a verbal summary of the home. Show me the floor plan of the subject then the 3D walkthrough as you describe what you see.

AI Agent: Retrieving data... The subject is a 1965 ranch-style home with 3 bedrooms, 2 bathrooms, and 1,800 square feet of GLA. Here is the floor plan. You’ll notice a traditional layout with bedrooms grouped on one side of the home, a central living area, and a combined kitchen-dining area on opposite side. Here you can see the home features metal siding, a 2-car attached garage, and a lot size of 0.25 acres. Permits show a roof replacement in 2021, which I’ve verified using a time-lapse sequence of aerial photos provided by Google.

Comparing MLS photos from the 2016 listing and to the current listing show that the kitchen was remodeled after the 2016 transaction. No permits were recorded for a kitchen remodel, however the quality and appearance of the work appear to be professional.

AI Agent: As we enter through the front door, the living room features hardwood floors....

Appraiser: Stop, I've seen enough. Proceed to the site overview. Show me aerial imagery and note any externalities.

AI Agent: Here is the aerial view. The subject backs onto a wooded area, providing privacy, and the front faces a busy residential street. The surrounding homes are similarly aged ranch-style properties, all well-maintained.

One externality to note: The busy road does not appear to affect usability but may be a consideration. The lender's reviewer would likely ask about it and GSE seller guides require some analysis,

Would you like to explore any additional details before we proceed to comp selection?

Appraiser: No, let’s move on. Pull similar sales within one mile, similar in size, style, and age, sold within the last six months. I would like to find one sale abutting the same busy road as the subject. You can go back to find something within the past year if necessary.

AI Agent: Searching… Out of 35 properties I’ve identified four potential comparables. Would you like me to summarize them or show their aerial views first?

Appraiser: Summarize them while showing me MLS photos of the interior.

AI Agent:

1. Comp 1: 3-bed, 2-bath, 1,850 sqft, sold for $450,000, located 0.5 miles away, renovated kitchen and updated bathrooms.
2. Comp 2: 3-bed, 2-bath, 1,950 sqft, sold for $420,000, located 0.1 miles away, original finishes, backs to a busy road.
3. Comp 3: 3-bed, 2-bath, 1,800 sqft, sold for $435,000, located 0.4 miles away, partially updated kitchen, original baths.
4. Comp 4: 3-bed, 2-bath, 1,900 sqft, sold for $460,000, located 0.8 miles away, fully renovated with a finished basement.

Comp 3 is the most similar in size and features but has an older kitchen. Comp 2 backs to a busy road. Comp 4 has a fully finished basement, which the subject lacks, likely requiring a significant adjustment.

Would you like me to help develop an adjustment for potential external obsolescence due to the busy road.?

Appraiser: Yes, typically we use around 3-5 percent for something like this. You can check in for something in my prior reports that we can use.

AI Agent: Searching report workfiles… Based on a prior appraisal you did in this neighborhood in 2025, you conclude a -2.5% adjustment for proximity to a busy road based on a paired sale. I will include a summary of that data the addendum....



Likely it will be the market will force appraisers to adapt. I don't think it will require any special appraisal software, just a computer with an AI Agent.

Me and teh AI agent having that conversation is inane, adds more time and contributes nothing I have a conversation within my mind based on years of prior appraisals, market knowledge etc. Which is faster andmore intuitive than answering questions from a nagging app.

That said, generative AI works in the bg and might seamlessly merge in fturue to add to the appraisal development. Or just be another expensive add-on to make $ for tech titans?

 

[CGinMN]

You haven't had a conversation with an AI agent. A lot of typing and mousework could become obsolete. Then recognize that it will learn your patterns and workflow and you won't even have to tell it what to do, it will just do it.

 

[alebrewer]

I have a conversation within my mind based on years of prior appraisals, market knowledge etc. Which is faster and more intuitive than answering questions from a nagging app.

Yes, but almost entirely wrong...